What if you could build a device that could mimic the way undersea creatures escape predators? It could be used as an artificial skin that changes its appearance to hide something (even submarines). As an electronic wallpaper, it could thwart thieves by catching them on a hidden camera. Or the new system could turn an entire wall into a TV screen. Now how cool is that?

These are among the goals of a new project funded by the U.S. Navy. The project’s scientists are taking lessons from nature to...